"LNG Carrier Orders and Prices Expected to Rise... Opportunity for Domestic Shipbuilders"[Click e-Stock]

DS Investment & Securities: "Continued Ship Shortage"

DS Investment & Securities stated on March 4 that both an increase in LNG carrier orders and a rise in vessel prices are highly likely to occur simultaneously as a result of the US and Israel's airstrikes on Iran. The firm analyzed that the combination of supply chain uncertainty in the Middle East and the expansion of US LNG projects will significantly boost global demand for LNG carriers. As a result, it is expected that domestic shipbuilders will directly benefit from an increase in new orders.

Daesung Kim, a research analyst at DS Investment & Securities, analyzed that the recent geopolitical risks in the Middle East could act as a catalyst for increased demand for LNG transportation. He explained that as the possibility of the Strait of Hormuz being blocked has come to the fore due to military clashes between the US and Iran, and as operations at Qatar’s Ras Laffan LNG plant have been halted by drone attacks, global LNG supply chain uncertainty has intensified. Since roughly 80% of Qatari LNG exports are destined for Asia, he noted that if supply disruptions occur, LNG imports in both Europe and Asia are highly likely to shift to the US and other regions.

In particular, the expansion of US LNG projects is highly likely to lead to an increase in LNG carrier orders over the long term. The total scale of LNG projects currently at the FEED (Front-End Engineering Design) stage and expected to reach Final Investment Decision (FID) in 2026 amounts to 81.0 MTPA (81 million tons per annum). Based on this, it is estimated that new demand for LNG carriers will reach approximately 131 vessels in 2029 and about 101 vessels in 2030. On the other hand, the remaining dock capacity at domestic shipyards by 2029 is estimated to be about 60 to 65 vessels, suggesting that a seller’s market may form, with demand exceeding supply.

LNG Carrier Price Trend

Vessel prices are also showing a rebound. According to Clarkson, as of February 27, the price of an LNG carrier stood at $248.5 million, marking a reversal to an upward trend for the first time in about two years. The actual order prices at domestic shipbuilders are already understood to be in the range of $252 million to $255 million, with the possibility being raised that prices may surpass $260 million during 2026.

Kim commented, "Although there is now a possibility that the expansion of Qatar’s North Field West may be delayed, Chinese shipyards are mainly focused on domestic and Middle Eastern orders, whereas domestic shipyards can directly benefit from increased LNG carrier orders for US projects," adding, "Therefore, we actually see this as an opportunity for domestic shipbuilders."

This content was produced with the assistance of AI translation services.